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HMRC warns companies miscalculating tax marginal relief

HMRC is running a one-to-many letter campaign targeting companies that have miscalculated corporation tax marginal relief in their company tax returns

Any business receiving a letter needs to respond, even if they do not think there is an issue with their tax return. Those who fail to respond are likely to face an HMRC compliance check and subsequent penalties.

The issue particularly affects businesses with ‘associated companies’.

In the letter, HMRC states: ‘We have information that shows your company has associated companies, but hasn’t declared them when claiming marginal relief.

‘Having associated companies reduces the taxable profit limits for claiming marginal relief. This means your company may owe more corporation tax.’

In all cases, it is essential to discuss any issues with a qualified tax adviser or accountant to ensure that the correct information related to the marginal relief is submitted to HMRC.

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